Japan faces potato chips shortage, US$12 per bag

calbee ceo — Akira Matsumoto, chairman and chief executive of Calbee Inc., opens a pack of the company's potato chips after an interview with Reuters at the company headquarters in Tokyo, Japan January 15, 2016. Reuters/Toru Hanai

Japanese consumers have been on panic buying after they learned that Calbee would temporarily halt the sale of its 15 types of potato chips. The company announced the halt due to a bad crop in Hokkaido serving as the key potato-producing region in the country. The potato chips currently sell at US$12 (AU$15.84) but its usual price cost less than 200 yen (AU$2.43).

In August 2016, four typhoons hit Hokkaido which is the first time to happen in one growing season since a century ago. The island produced almost 80 percent of Japan's potatoes as well as other crops including carrots, corn and pumpkins.

A Tokyo-based spokeswoman said that the company was doing everything to resume the sales again. She also said that they asked Kyushu farmers to harvest their crop earlier than scheduled. The shortage was expected to spread to fast-food chains and restaurants relying on spuds for their dishes. Among the chips that would be temporarily discontinued include French salad, pizza, and plum flavors. Koikeya’s rich consommé flavor would be halted as well.

She said that the company would consider using more imported potatoes from the U.S. However, she said that many of the imported potatoes did not reach the level of quality that the product required and they could not cover the full production range. She added that there were regulatory hurdles that came with the importation of the potatoes contributing to the shortage of their supply.

Potato chips are big deal in the Japanese market. According to the TV Asahi poll, Calbee's potato snack products were the most and second most popular among the 10,000 people surveyed between ages 10 to 50 years old. There were 13 companies being ranked in the survey and Nestle Japan's Kitkat ranked in the third spot. Calbee has a market value of 507.9 billion yen (AU$6.1 billion) with 73 percent market share of potato chips. PepsiCo Inc. owns 20 percent of the company's market share.

Shortage of food staples was not the first time in Japan. There were reports in the past of butter shortages due to the declining number of dairy farmers and lack of imports due to high tariffs. Koike-ya Inc. has also halted the sale of its nine snack products. Calbee's potato-chip rival said that it would not rely on imports as the company only used domestic potatoes. Both companies were not sure when the sales of their products would resume.